Sony Channels Lou Reed Seeking ‘Perfect’ PlayStation 4 Debut

Gamers view a game menu as they play Sony Corp.'s "The PlayRoom" augmented reality video game on the company's PlayStation 4 (PS4) games console during the Eurogamer Expo 2013 in London on Sept. 28, 2013. Photographer: Matthew Lloyd/Bloomberg

Nov. 15 (Bloomberg) -- Sony Corp. chose Lou Reed’s
“Perfect Day” as the background music in ads for the new
PlayStation 4 that goes on sale in U.S. stores today.

Chief Executive Officer Kazuo Hirai, who has made the
video-game console the centerpiece of a corporate turnaround
strategy, needs the introduction to come off without a hitch.

Robust PS4 sales would provide much-needed momentum after
Hirai posted a surprise second-quarter loss last month. If
enough people buy the device, and a $50-a-year PlayStation Plus
service, Tokyo-based Sony stands to generate billions of dollars
from sales of movies, TV shows and music, as well as games.
Hirai has a one-week jump on Microsoft Corp., which starts
selling its pricier Xbox One on Nov. 22.

“Gamers are tired of that PS3 that they’ve had for six or
seven years, and they’re ready to buy a new one,” Michael
Pachter, an analyst with Wedbush Securities in Los Angeles, said
this week on a webcast. “Especially given that the Xbox One
costs 100 bucks more, I think that you’ve got to give Sony a nod
for faster out of the gate.”

Sony’s lower $399 price gives it the advantage over the
$499 Xbox One, according to Pachter. Sony’s forecast for sales
of as many as 5 million consoles by the end of March may be low,
he said, with the PS4 likely to sell out through January.

Entertainment Center

The two top combatants in the $93 billion-a-year industry
are employing different pitches to holiday shoppers for machines
that are similar on the inside. The PS4, with a combined
processor and memory from Sunnyvale, California-based Advanced
Micro Devices Inc., is built on a PC-like design comparable to
the Xbox One.

Sony is employing a newer, faster type of memory that could
provide an edge with graphics and help win over hardcore game
players. The company also will benefit from efforts to woo
independent developers, according to Andrew House, head of
Sony’s worldwide game operation.

The promotional video features two gamers singing Reed’s
“Perfect Day” while immersed in the worlds of titles including
“DriveClub” and “Killzone Shadow Fall.”

Both Sony and Redmond, Washington-based Microsoft are
responding to shifts in the video-game industry, especially the
loss of players to tablets and mobile phones. Nintendo Co., for
example, has sold 3.9 million Wii U units since November, far
below the company’s estimates. To spur sales, Sony and Microsoft
are offering powerful Web-connected consoles capable of
delivering games and entertainment, such as TV, films and music.

“It represents a very large opportunity, not just for
PlayStation but for Sony overall, to create in essence our own
entertainment community,” House said in an interview. “Until
now, we didn’t have a large networked consumer base.”

Streaming Plans

Within 12 months, Sony will begin streaming original
programming to the PS4, House said, in a nod to the material
owned by his company’s entertainment divisions. It is also
courting independent game makers with expanded developer funds,
and will offer free indie games with PlayStation Plus.

Sony American depositary receipts fell 0.8 percent to
$18.50 at the close in New York. They have gained 65 percent
this year. The stock rose 3.4 percent to 1,846 yen in Tokyo.

To promote the PS4, the maker of Bravia TVs and “Spider-Man” films took over the Standard hotel in New York’s
Meatpacking District, lighting the structure with PlayStation
artwork and hosting an arcade for players to try the machines.

Sony began selling some of the players from the hotel
starting at midnight New York time. The PS4 will be available in
31 other countries by January and will go on sale in Japan on
Feb. 22.

Indie Games

Microsoft, which has been pitching the Xbox One’s motion-sensing Kinect camera as a controller for all forms of living
room entertainment, has focused its message on applications and
exclusive content, such as a live-action TV show from Steven
Spielberg. The improved Kinect will make it easier for users to
multitask -- whether it’s video phone calls on Skype, playing
“Forza Motorsport” or checking scores on ESPN, said David
Dennis, a Microsoft spokesman.

There won’t be much in the way of indie games for the Xbox
One kickoff, though “you should expect to see plenty coming
soon,” Dennis said.

The PS4 camera also supports voice and facial recognition
similar to Microsoft’s Kinect. Marketed as optional, it’s
required to play the pre-installed “PlayRoom” augmented
reality game. Sony has said it doesn’t see the camera as
priority, for now, for serious gamers.

“There are plans for innovation on these machines even
beyond gaming,” said Tony Bartel, president of GameStop Corp.,
the Grapevine, Texas-based retailer that accounts for almost
half of Sony and Microsoft’s game software sales.

Long Game

About 70 million current PlayStation owners use the
company’s PlayStation Network to access online services. To
attract more, Sony will give PS4 buyers in the U.S. and Canada a
$10 Sony Entertainment Network wallet credit, a 30-day free
PlayStation Plus trial, and a 30-day free Music Unlimited
service trial.

“The PlayStation Network and PlayStation Plus are going to
be front and center of our efforts, a lot more than it has in
the past,” House said.

Over the long-term, Pachter also gives Sony the edge,
forecasting sales of as many as 120 million PS4 players,
compared with 100 million for the Xbox One and 30 million for
Nintendo’s Wii U.

“A 20 percent price difference means 20 percent higher
sales, plain and simple,” Pachter said yesterday in an e-mail.
“If and when Microsoft cuts the price, they’ll sell the same
number of units, maybe Microsoft sells a bit more.”